This article first appeared on GuruFocus .
Release Date: March 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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WuXi XDC Cayman Inc ( FRA:L74 ) reported a significant revenue increase of 46.7% to RMB5.94 billion in 2025.
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The company achieved a record number of 70 new ICMC projects and 10 new PBQ projects in 2025.
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Gross profit grew by 72.5% year over year, reaching RMB2.14 billion.
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The company's backlog grew by over 50% year over year, reaching close to $1.5 billion, providing strong visibility for 2026.
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WuXi XDC Cayman Inc expanded its global footprint with strategic acquisitions and capacity expansions in China and Singapore.
Negative Points
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The integration of BioDLink and ramp-up of the Singapore facility may potentially dilute margins in 2026.
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The company's revenue growth is heavily dependent on exchange rate fluctuations, particularly with the US dollar.
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There is uncertainty regarding the impact of geopolitical events, such as the Middle East situation, on raw material costs.
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The company faces competition from overseas peers expanding their capacity, such as those in South Korea and Japan.
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Licensing income is not included in the company's forecast due to its irregular nature, which may impact revenue predictability.
Q & A Highlights
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Q: How should we think about 2026 revenue and earnings growth given the strong increase in the backlog number, the consolidation of BioDLink, and the ramp-up of the Singapore facility? A: We expect to maintain a growth rate of around 35% for the top-line revenue in 2026. The exact growth rate will depend on exchange rates, as a significant portion of our income is in US dollars. We aim to maintain the gross profit margin at the same level as 2025, despite the integration of BioDLink and the ramp-up of the Singapore facility.
Q: Should we expect any IP income in 2026, especially after the deal with an AI-driven drug development company? A: Our guidance does not include potential IP income, as licensing agreements are irregular and depend on partner progress. While we continue to invest in R&D, we advise not to place significant weight on licensing income in the near term. If it occurs, it would be an upside to our current forecast.
Q: With a backlog of $1.5 billion, mostly from new orders, when will the commercial part ramp up significantly? A: The ramp-up of commercial projects correlates with the development stage of ADC drugs. Currently, most contracts are in pre-clinical or clinical stages with shorter delivery timelines. As more projects reach commercialization, the structure of our backlog will gradually change, with more end-stage projects contributing to revenue.
Q: Has the company considered whether the industry can absorb the new capacity, given the expansion plans of overseas peers? A: We believe the global supply situation will remain tight in the next few years, especially with the next wave of ADCs nearing commercial approval. The demand is expected to outpace capacity increases, justifying our proactive capacity expansion, including the acquisition of BioDLink and the Singapore site.
Q: Can you update on the Singapore site's client contracts and expected revenue contribution for this year and 2027? A: We expect minimal revenue contribution from the Singapore site in 2026, as GMP release is scheduled for the next few months, with production starting later in the second half. Our focus is on engaging clients and building a significant backlog for future years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
